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Gearbox Entertainment has been separated from Embracer Group’s portfolio of video game firms, a notable development in the gaming industry. In the process, Take-Two Interactive secures the deal for a substantial $460 million. With the breakdown of a planned $2 billion merger with Saudi Arabia-backed Savvy Games Group in 2023, Embracer undertook major restructuring measures with the goal of reducing operations. This transaction comes after those efforts. Notably, Embracer acquired Gearbox for a significant $1.3 billion in 2021; this transaction occurred barely three years after that purchase.
As part of the deal, Gearbox’s production companies—Gearbox Software, Gearbox Montreal, and Gearbox Studio Quebec—as well as well-known properties like Borderlands/Tiny Tina’s Wonderlands, Homeworld, Risk of Rain, Brothers in Arms, and Duke Nukem are presumably no longer owned by Embracer. Now, these highly sought-after properties join Take-Two’s collection, complementing its ownership of gaming behemoths like Rockstar Games and 2K.
In a press statement from Take-Two, Gearbox states that work is still being done on six games, five of which are sequels and one of which is an unnamed new IP. Interestingly, two of these follow-ups are from the well-liked Homeworld and Borderlands series.
However, Embracer retains certain branches/subsidiaries of Gearbox, including Gearbox Publishing San Francisco (set for renaming), which retains publishing rights to franchises like Remnant and Hyper Light Breaker. Additionally, Embracer retains Cryptic Studios (Neverwinter Online, Star Trek Online), Lost Boys Interactive, and Captured Dimensions, with plans to integrate them into other parts of Embracer Group.
Embracer CEO Lars Wingefors emphasizes, “Today’s announcement marks the result of the final structured divestment process and is an important step in transforming Embracer into the future with notably lower net debt and improved free cash flow. Through the transaction, we lower business risk and improve profitability as we transition to becoming a leaner and more focused company. After evaluating several options for Gearbox, I am happy that we have reached a solution that is in the best interest of all stakeholders. Randy and the team have been great team members throughout the past years, and I would like to thank them all for that. As one of the world’s greatest games developers, I am confident that Gearbox will continue to innovate and thrive in their new home within Take-Two.”
Gearbox founder and CEO Randy Pitchford assures, ”As a significant long-term Embracer Group shareholder, I believe in the strategy for the Embracer Group going forward and am completely convinced that this transaction is the best possible scenario and an obvious net positive arrangement for Embracer Group, for TakeTwo and, of course, for Gearbox Entertainment. My primary interest is always Gearbox, including our talent and our customers. I want to personally ensure fans of our games that this arrangement will ensure that the experiences we have in development at Gearbox will be the best it can possibly be.”